Perspective - July 2015

July 2015

OKLAHOMA COUNCIL OF PUBLIC AFFAIRS

Contrary to the historical mythology of the education establishment, Jefferson’s proposals for education bear no resemblance to the government school monopoly we know today. Indeed, government control over the minds of the young would have been seen by the founding generation as intolerable tyranny. The road back to self-government and the principles of the Declaration runs through educational choice.

In Case You Missed It Arthur Brooks went toe-to-toe with President Barack Obama.

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School-choice opponents in Oklahoma need to answer five important questions.

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Does early childhood education impede emotional and cognitive development?

Before the crash that she blamed on speculators, Elizabeth Warren made a bundle flipping Oklahoma City houses.

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Federal-funds transparency measures are just the sorts of creative strategies needed to put Oklahoma bureaucrats on the defensive and force change upon them.

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Norman Public Schools are offering “free” meals to students regardless of income—and putting it on the kids’ credit cards.

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Oklahoma State University agreed to pay $25,000 to settle a lawsuit over denying pro-life students their First Amendment rights.

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A longtime principal at Jenks Middle School paints a troubling picture of “daily life as a student in a typical middle or high school classroom in America today.”

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Campus radicalism at the University of Oklahoma is perhaps worse than you thought.

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Steve Forbes’ memo to certain governors and state legislators: Income-tax rate cuts work.

Always.

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PERSPECTIVE OCPA Staff

OCPA Trustees

Brandon Dutcher ...........................................Editor

Blake Arnold • Oklahoma City

David McLaughlin • Enid

Glenn Ashmore • Oklahoma City

Lew Meibergen • Enid

Robert D. Avery • Pawhuska

Ronald L. Mercer • Bethany

Alex Jones .............................................Art Director

OCPA Researchers

Lee J. Baxter • Lawton

Lloyd Noble II • Tulsa

Michael Carnuccio ...................................................President

Steve W. Beebe • Duncan

Mike O’Neal • Edmond

Brandon Dutcher .................................Senior Vice President

G.T. Blankenship • Oklahoma City

Bill Price • Oklahoma City

Trent England ..........Vice President for Strategic Initiatives

John A. Brock • Tulsa

Patrick T. Rooney • Oklahoma City

Dacia Harris .........................Development Projects Manager

David R. Brown, M.D. • Oklahoma City

Melissa Sandefer • Norman

Rachel Hays .........................................Development Director

Paul A. Cox • Oklahoma City

Thomas Schroedter • Tulsa

Alex Jones ......................................Communications Director

William Flanagan • Claremore

Richard L. Sias • Oklahoma City

Josephine Freede • Oklahoma City

Greg Slavonic • Oklahoma City

Ann Felton Gilliland • Oklahoma City

Charles M. Sublett • Tulsa

John T. Hanes • Oklahoma City

Robert Sullivan • Tulsa

Ralph Harvey • Oklahoma City

Lew Ward • Enid

John A. Henry III • Oklahoma City

William E. Warnock, Jr. • Tulsa

Henry F. Kane • Bartlesville

Dana Weber • Tulsa

Robert Kane • Tulsa

Daryl Woodard • Tulsa

Gene Love • Lawton

Daniel J. Zaloudek • Tulsa

Renae Page ................................................Executive Assistant Jonathan Small ................................Executive Vice President Hannah Wallis ............................Communications Associate Teresa Yoder ........................................Director of Operations

Steven J. Anderson, MBA, CPA Research Fellow Tina Dzurisin Research Associate Trent England Dr. David and Ann Brown Distinguished Fellow for the Advancement of Liberty Jayson Lusk Samuel Roberts Noble Distinguished Fellow Matt Mayer, J.D. Research Fellow J. Scott Moody, M.A. Research Fellow Andrew C. Spiropoulos, J.D. Milton Friedman Distinguished Fellow Wendy P. Warcholik, Ph.D. Research Fellow

Tom H. McCasland III • Duncan

Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc., an independent public policy organization. OCPA formulates and promotes public policy research and analysis consistent with the principles of free enterprise and limited government. The views expressed in Perspective are those of the author, and should not be construed as representing any official position of OCPA or its trustees, researchers, or employees.

Larry Arnn

John Bolton

William F. Buckley

George W. Bush

Arthur Brooks

Jeb Bush

Dinesh D’Souza

President of the American Enterprise Institute Author of the new book The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America

October 21 • Tulsa Mitch Daniels

Artur Davis

For more information, contact Rachel Hays at 405.602.1667 or rachel@ocpathink.org

Jim DeMint

J. Rufus Fears

Mike Huckabee

Brit Hume

Laura Ingraham Frank Keating Jeane Kirkpatrick

Rich Lowry

Ed Meese

Russell Moore Stephen Moore Peggy Noonan Marvin Olasky

Star Parker

Michael Reagan

Clarence Thomas

Steve Forbes

Paul Ryan

Scott Walker Malcolm Wallop

Tommy Franks

John Fund

Newt Gingrich David Horowitz

Charles Krauthammer

Art Laffer

Sarah Palin

Joe Sobran

Thomas Stafford

John Stossel

Cal Thomas

John Walton

J.C.Watts

Allen West

Walter Williams

Past OCPA speakers are pictured above.

American democracy was founded on private schooling and parental control of schools.

Our government school monopoly can’t effectively prepare students for the new economy, or for the moral character and self-government 4

that democracy requires.

PERSPECTIVE • July 2015

American democracy was founded on private schooling and parental control of schools. You’d never know that, of course, from the historical mythology of the school unions. If they spent less time weaving fantasies about Thomas Jefferson and more time studying actual history—or just contemplating the principles Jefferson articulated in the Declaration of Independence—they’d discover some uncomfortable realities.

The Oklahoma Education Association says government-run education is “the cornerstone of our republic.” But all education at the time of the American founding was what we now call “private” education. The first schools were established during the colonial era by religious organizations, and that model then spread across the country. Other forms of education included apprenticeship—a path Jefferson followed into the profession of law, studying under George Wythe without earning a law degree—and private tutoring.

The schools this country was founded upon saw themselves as responsible to families, churches, and, in a broad way, the local community. They were not governmentowned or government-run. True, before the revolution churches often had a relationship with the state through the establishment of religion. And even when church and state were separated after the revolution, boundaries were not always clear in practice—in a small town, for example, you might have the same set of voters electing, and the same set of leaders sitting on, both the town council and the church elder board.

But schools were not understood to be a government function.

This does not mean that education was “private” in the sense of playing no role in the community or having no responsibility to prepare people for good citizenship in a shared, democratic civil society. On the contrary, it was understood by everyone that good education was essential both to community and to democratic values. But schools were not responsible to government; they were responsible to families and churches.

In fact, a strong and democratic civil society cannot be maintained in any other way, as they well knew. The whole point of what they called “democratic and republican” government was that sovereignty rested with the people rather than the rulers.

This requires the people to be well formed in the virtues and self-control freedom requires—and that the definition of what that means is not subject to the power of the rulers. Government control over the minds of the young would have been seen by the founding generation as intolerable tyranny.

This is why parental control of schools was so important. Schools were funded by parents’ tuition and by other donations. Their job was to serve parents and raise

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Government control over the minds of the young would have been seen by the founding generation as intolerable tyranny. children in the values parents desired.

We constantly hear Thomas Jefferson invoked as the source of our government school monopoly. Responsible historians have long since shown that Jefferson’s proposals for education bear no resemblance to the government school monopoly we know today, but this doesn’t stop the mythmakers from straining to make the connection. As the web page of an Oklahoma elementary school named for Jefferson solemnly intones: “Our country’s children today are assured a free and public education through his strong-held [sic] belief that educating the masses was the only sure way to ensure our liberty was preserved.”

Crediting Thomas Jefferson as the source of our government monopoly system is about as accurate as crediting him with the abolition of slavery. You can find places where Jefferson said slavery should be abolished. But, as we all know, he shamefully did nothing to help make abolition a reality. The same is true for government control of education.

In fact, the first government school monopoly was created in Massachusetts in the 1830s, as a result of a political movement that repudiated the principles of the American founding.

Under the leadership of Horace Mann, this movement had two goals, one economic and one religious. Both of these goals represented a movement away from a self-governing citizenry and toward the sovereignty of a ruling class.

The economic motive was technocratic. As the Industrial Revolution pushed the economy from an agricultural basis to a manufacturing basis, a growing number of people began to think in terms of a division between managers and “the working class”—a concept unknown to the founders. In the eyes of these technocrats, workers had no understanding of their work and brought nothing to the table other than dumb muscle.

A suitable system of education would be needed. The old system allowed families to decide what their children needed to know, and as a result it was (according to the managers) unlikely to prepare people for a new economic world they could not be expected to understand. The new educational system would be under the control of the omniscient and omnibenevolent managing class, who understood what workers did and didn’t need to know in the new economy.

The religious motive was, if anything, more sinister still.

Mann and his movement were drawn from the Unitarian world of the wealthy Boston elite. They looked down with scorn and contempt upon the unreconstructed evangelical Calvinism of the Massachusetts countryside—the patrimony of the Puritan settlers. They did not do much to conceal their desire to use the new school system to educate the children of the benighted evangelical masses in the new, enlightened religion of Unitarianism.

Nothing makes me angrier than hearing evangelicals

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PERSPECTIVE • July 2015

complain that “public schools used to teach the Bible!” Yes, they did. They taught the Bible—for the purpose of cultural genocide against evangelicals. And this genocide was quite successful, as you can discover by trying to find an evangelical in the Massachusetts countryside today.

Thank heaven our Roman Catholic friends were smart enough to see what was going on when the government monopoly was turned against them. Not many Americans in the mid-19th century shared the Boston Brahmins’ contempt for evangelicals, but a lot of them did want to purge Catholic immigrants of their filthy popery. Catholics weren’t having any of it; in the great tradition handed down from the American founding, they ignored the government monopoly and started their own schools. America’s newcomers were more faithful to the principles of their adopted home than America itself was.

This history sheds a new light on why the government school monopoly can’t effectively prepare students for the new economy, or for the moral character and self-government that democracy requires. As a monopoly system, it is inherently technocratic and hostile to innovation and the entrepreneurial virtues. And it cannot explain to children why they should be moral; a monopoly system in a religiously diverse society cannot speak convincingly or act formatively when it comes to virtue.

Today, the road back to self-government and the principles of the Declaration of Independence runs through school choice.

Where the rulers control the formation of the minds, hearts, and skills of the young, sovereignty rests with them. Putting parents back in charge of education also puts citizens back in charge of civil society and government.

Greg Forster Greg Forster (Ph.D., Yale University) is a senior fellow with the Friedman Foundation for Educational Choice. He is the author of six books, including John Locke’s Politics of Moral Consensus (Cambridge University Press, 2005) and Joy for the World: How Christianity Lost Its Cultural Influence and Can Begin Rebuilding It (Crossway Books, 2014). He has written numerous articles in peer-reviewed academic journals as well as in popular publications such as the Washington Post and the Chronicle of Higher Education.

Home Economics

These Moms Deserve Our Appreciation America recently celebrated Teacher Appreciation Week, a time to applaud the 3.5 million schoolteachers in this country, including some 400,000 working in private schools.

But there are hundreds of thousands more teachers who also deserve our gratitude, including one who lives under my own roof. The very picture of unselfishness, Susie Dutcher goes about her work each day with a quiet strength and dignity, toiling into the wee hours over essays and worksheets and lesson plans for our homeschooled children.

“She looks well to the ways of her household,” as the proverb says, “and does not eat the bread of idleness.”

“I respect your public service,” she once testified before a subcommittee of the U.S. Senate Finance Committee. “And I hope you respect my public service, which consists of providing the public with one healthy family, comprised of well-adjusted, productive individuals.

“Because of the time and money and energy I invest in their lives,” she said, “I believe my children will grow up to do great things. I believe none of them will end up on the welfare rolls, in prison, or in any way dependent upon the state.”

Economists tell us the difficult work of childrearing provides a benefit to society (I believe the term is “positive fiscal externality”). “Everyone benefits from having a next generation in place to sustain the society and keep its institutions going,” writes Jennifer Roback Morse. “In modern developed countries, the family saves the state money by taking care of its own dependent young, rather than foisting that responsibility onto the taxpayers.”

Our political leaders should appreciate these parents, including those mothers who educate their own children.

These teachers build human capital without making demands on budget-conscious appropriators already besieged with requests from competing interests.

After all, policymakers don’t have to provide my children’s teacher a salary, health and retirement benefits, and so on.

Indeed, her family’s tax dollars help pay the salaries of public school teachers. She pays for school breakfasts and lunches, too—both for our own children and for the children of our fellow citizens. She buys her own school supplies (without the tax deduction, alas, that other teachers enjoy) and also buys school supplies for others.

When it’s all said and done, her hard work of educating our children will have saved our political leaders well over half a million dollars. That’s money they can use to build roads and bridges, incarcerate criminals, or pay schoolteachers.

Imagine how much money politicians would have to come

up with—not only current expenditures but also construction costs—if the nation’s 1.77 million homeschooled students showed up at their local public school wanting to enroll.

My children’s teacher is not a professional. She’s an amateur, a word which traces to the Latin amare (“to love”).

“Rather than an exchange,” economist John D. Mueller explains, “love is best described in economic theory as a gift or voluntary ‘transfer payment’—that is, as a voluntary distribution out of one’s resources not made in compensation for useful services rendered.”

As she told the senators that day, “I used to be a schoolteacher, and certainly the salary and benefits I could earn teaching school would improve our material well-being.

But some checks can’t be cashed at the bank: My son Lincoln, when he was three years old, said to me one day, ‘I’m proud of you ‘cause you do the right things. Like take a shower, and fix my breakfast … Those kind of things.’

“I know it’s all worth it when we’re on the floor playing with blocks and I notice out of the corner of my eye that he has stopped playing and is staring at me like a smitten young man. ‘I love the way you talk,’ he said to me. ‘And I love the way you smell.’ “‘How do I smell?’ I asked. “‘Like a mommy.’”

That little boy’s all grown up now, headed to medical school in the fall—thanks to his teacher, who very much deserves our appreciation.

Brandon Dutcher Brandon Dutcher (M.A. in public policy, M.A. in journalism, Regent University) is senior vice president at OCPA. He’s the editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His articles have appeared in Investor’s Business Daily, Forbes.com, WORLD magazine, the Tulsa World, The Oklahoman, and 200 newspapers throughout Oklahoma and the U.S.

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State-Run Enterprises and One-Ton Nails A simple insight we teach introductory economics students is that for-profit firms strive to maximize profit. What is more important, however, is that all for-profit firms, from a roadside taco stand to the largest company, receive constant feedback as to how they are doing through the metric of profits and losses.

Economic losses send a clear signal that the firm is doing something wrong and gives it an incentive to change.

Economic profits send a clear signal that the firm is doing something right.

Is this system perfect? Of course not. Signals can be misread. Lots of firms incur losses before they become profitable. Today’s profits can quickly erode because of changing conditions.

And of course, profits can be obtained illegally, fraudulently, unethically, or by cajoling government to rig the market.

Nevertheless, profits are a powerful tool keeping a firm focused and are a pretty clear signal of how well the firm is doing.

A major problem in public enterprises is there are no equivalent signals to profits and losses. Let us examine an area of intense public interest and scrutiny: higher education. Over the last decade the main funders of public universities, state legislators, have demanded more accountability from the ivory tower. This demand for accountability has emerged for a host of reasons that are for the most part valid. The goal is to generate “better educational outcomes.”

But what exactly does that mean?

What metric shall be used to measure

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PERSPECTIVE • July 2015

“better”? Two have emerged: the fouryear graduation rates of students and the number of science graduates. In Indiana, for example, a large component of state funding rests on an institution’s “success” on these margins. Yet everyone knows there is much more to higher education than getting through in four years and being a science major.

At best this is an imprecise and clumsy metric of success.

Go back to a for-profit firm: if the new Apple gizmo works better in a way that is pleasing to its customers, the gizmos fly off the shelf and Apple’s profits rise.

If Apple can find a less costly way of producing its gizmos while maintaining their quality, Apple’s profits rise. In any firm there are hundreds of margins for improvements in product quality and hundreds of potential margins for cost reductions. For-profit firms are constantly seeking out those margins.

Increased profits are an indication that the right ones have been chosen, whereas declining profits or outright losses are an indication of the opposite.

In publicly funded enterprises the process is very different. A government agency thinks up margins of improvement. They then choose the ones that can be measured. They then reward the public enterprise by how well it performs on those margins.

However, because there is no profit mechanism in place, how does anyone know whether the chosen margins are the best measures of success, poor measures of success, or wrong measures of success?

One is reminded of the Soviet nail

factory directed to produce one ton of nails that produced a single, very large one-ton nail. Why not direct all faculty members to pass all students independent of performance and insert some ersatz science component in all courses?

Of course, the response of both bureaucrats and administrators is we need more detailed metrics, more studies (state-funded of course), and a better-managed process. Yet a more complex formula is likely to become unmanageable, open more ways to game the system, and generate more unanticipated consequences. It will produce more one-ton nails.

There is simply no good way out of the problem—it is an inherent problem in any not-for-profit enterprise. Most all of us agree that many socially useful enterprises cannot or should not be run for profit. The argument above is more an observation than a critique.

The simple fact is the information given by profits can’t be given if there are no profits.

Cecil Bohanon A Muskogee native, Cecil Bohanon (Ph.D., Virginia Polytechnic Institute and State University) is a professor of economics at Ball State University. He has published numerous refereed academic articles and popular commentaries on economics and policy issues, and also produced an Emmy-award-winning film on entrepreneurship entitled Increasing the Odds.

Reviving Rural Oklahoma

Untapped Potential in Oklahoma High-Value Crops This article is the second in a multi-part series on “Reviving Rural Oklahoma.”

—Editor

The recent success stories of biotechnology, the boom in oil production through fracking, and the ongoing growth in the major urban areas have created an illusion for some that Oklahoma is no longer an agricultural state. And while recent achievements in creating a more diversified economy certainly bode well for the future prosperity of the state, there can be no doubt that Oklahoma still has a very large agricultural sector that continues to provide a substantial contribution to the state’s fiscal diversification and stability.

The scope of the current size of the agricultural community (shown in Table 1, which does not include the millions of acres devoted to livestock production) drives home the mammoth size of these operations in Oklahoma.

The interesting thing about Oklahoma’s rural

diversification is that it is largely in areas not subject to the federal farm program’s subsidies and price supports. Table 2 (on page 10) highlights how much opportunity exists for Oklahoma in those areas where the state is extremely low in the rankings. For example, Oklahoma’s standing at 44th in the nation in the area of the “high value” crops of vegetables, melons, potatoes, and sweet potatoes highlights an area with exciting upside potential. Just the fresh-to-market segment of this sector of the economy generated more than $10 billion in payments to U.S. farmers in 2012, according to the USDA. It is easy to understand why many of the states ranked above Oklahoma generate more dollars from fresh produce.

The majority of the value of production differences can be explained by a long growing season and/or proximity to large urban markets. However, those disadvantages are not true for the most obvious market for Oklahoma’s fresh produce growers: the consumers living in Oklahoma. Oklahoma

continued on page 10 >>

Table 1 Oklahoma Farms Farm Operations - Number of Operations

79,600

Farm Operations - Acres Operated

34,300,000

Farm Operations - Area Operated, Measured in Acres / Operation

431 Livestock Inventory

Cattle, Cows, Beef - Inventory ( First of Jan. 2015 )

1,900,000

Cattle, Cows, Milk - Inventory ( First of Jan. 2015 )

40,000

Cattle, Incl Calves - Inventory ( First of Jan. 2015 )

4,600,000

Cattle, On Feed - Inventory ( First of Jan. 2015 )

265,000

Goats, Meat & Other - Inventory ( First of Jan. 2015 )

95,000

Goats, Milk - Inventory ( First of Jan. 2015 )

6,900

Sheep, Incl Lambs - Inventory ( First of Jan. 2015 )

53,000

Hogs - Inventory ( First of Dec. 2014 )

2,070,000 Milk Production

Milk - Production, Measured in Lb / Head Milk - Production, Measured in Lb

17,425 697,000,000

Source: U.S. Department of Agriculture, http://www.nass.usda.gov/Quick_Stats/Ag_Overview/stateOverview.php?state=OKLAHOMA

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imports the majority of its fruits and vegetables even during Oklahoma’s harvest season for the same or similar produce.

In an excellent 2003 article entitled “The Future of Fresh Market Fruit, Vegetable Production in Oklahoma,” Steve Upson of the Samuel Roberts Noble Foundation noted that “Oklahoma has always produced quality pecans, peaches, watermelons, sweet corn and strawberries,” yet the acreage of fresh market fruits and vegetables grown in Oklahoma has been on the decline over the last half century. This has occurred despite the existence of more than 250,000 acres of bottomland capable of being irrigated along the Arkansas, Washita, and Red rivers and many thousands of acres of irrigated upland soils that would be suitable for fruit and vegetable production.

Oklahoma’s growing season of more than 200 frost-free days in central and southern Oklahoma is sufficiently long to accommodate production of a number of high-value fruits and vegetables. When you add those positives together one begins to wonder why Oklahoma lags the majority of the

states in producing more of these types of crops that provide producers higher returns.

Oklahoma hovers near the bottom in comparison to the rest of the states in both acres in fresh vegetable production and value returned to the farm from fresh vegetable production.

Mr. Upson notes that Oklahoma specialty-crop producers have not kept up with production increases on existing acres, which is evident given that Oklahoma is dead last in return per acre among the states reporting.

The issues restricting production of fresh produce revolve around the weather. Heavy rain or no rain, hail, high winds, and unpredictable freezes impact yields on crops in areas of the state on an annual basis. However, our neighbors Colorado (returning $111 million and $5,400 per acre), New Mexico ($121.5 million and $8,100 per acre), and Arkansas ($25 million and $8,920 per acre) have similar growing seasons and weather hazards as Oklahoma, which returns a mere $5 million and $1,790 per acre from the lucrative fresh produce marketplace.

Table 2 Oklahoma Agricultural Production

Cattle and calves

Quantity $s in Quantity thousands (thousands) $ 3,402,919

Horses, ponies, mules, burros, and donkeys

$

42,166

7

Hogs and pigs

$

656,407

10

Cotton and cottonseed

$

51,851

15

Poultry and eggs

$

961,302

16

Fruit, tree nuts, and berries

$

41,373

20

Sheep, goats, wool, mohair, and milk

$

13,227

20

Nursery, greenhouse, floriculture and sod

$

208,109

21

Other crops and hay

$

270,641

21

Grains, oilseeds, dry beans, and dry peas

$

1,283,997

25

Other animals and other animal products

$

12,382

26

Milk from cows

$

164,341

30

Cut Christmas trees and short rotation woody crops

$

265

38

Vegetables, melons, potatoes and sweet potatoes

$

19,333

44

Aquaculture

$

1,271

48

FY-2012

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PERSPECTIVE • July 2015

U. S. Rank 6

Reviving Rural Oklahoma

Even without those hazards, specialty crops lack some of the risk-management options of the cash grain crops. While some limited federal crop insurance options are available for some specialty crops, the insurance options are generally much better established and better understood by the agricultural community. However, one has to consider that risk management is a two-sided coin. On one side you control the risk of losing your whole crop and the dollars you have invested in it, while on the flip side you limit the profit you can make per acre of crops by choosing that crop.

The modern farmer is well aware of how to mix “products” to maximize return within the risk/reward curve. The dedication of some percentage of irrigated acres to highervalue crops can provide significant upside. There is also the potential to double crop with spring and fall crops of coolweather crops like broccoli, which can allow smaller farms to survive and prosper.

A welcome by-product of high-value crops is the ability to keep family members home or bring them back to the farm. According to Craig A. Chase, the local food and farm coordinator at Iowa State University, “the children of corn farmers are coming back to the farm, and carving out 5 or 10 acres to grow fruits and vegetables. They can easily make $30,000 to $40,000 a year.” There are already some examples in Oklahoma of high-value crops providing an avenue to emulate the tradition of the family farm where sons and daughters remain on the land.

In fact, the 2012 national Future Farmers of America Proficiency Award in Vegetable Production-Entrepreneurship/ Placement was won by Allison Lynn Slagell of Weatherford.

Ms. Slagell, her father, and her brother are growing and marketing commodity and vegetable crops from their western Oklahoma farm. The mix in their operation is 350 acres of irrigated chip potatoes for Frito Lay and Allen’s, 475 acres of spinach for Allen’s that will be canned, 225 acres of collards and other greens for canning, and 20 acres of pumpkins for farmer’s markets in Oklahoma City.

The Slagell family joins other small pockets of successful fresh fruit or vegetable production across the state. These types of small producers have become widespread enough that, according to the Oklahoma State University Extension Agency, more than 60 Oklahoma producers and processors of organic vegetables and fruits were in existence as of September of 2014. Yet as we have noted, Oklahoma sorely lags the vast majority of the states in producing vegetables, fruits, and other high-value crops, much less organic produce.

A missing element in Oklahoma is the presence of the big processors and their national and international distribution channels. Processors go where there is produce they can make money on. It is that plain and simple. But Oklahoma has

not yet proven that it can capitalize on its central location to become even a regional player.

That is not to say that certain agricultural growers have not found profitable niches. J-M Farms, for example, is a major player in the fresh market mushroom business, with 600 employees generating 400,000 pounds of mushrooms per week that leave the plant for shipment to states all over the region. Their ability to distribute a highly perishable product over such a wide area highlights the potential for Oklahoma’s farmers to find profits through fresh-market produce. It should be kept in mind that many of the crops suitable for fresh-market production, such as green beans, also have the potential for the freezer market—which adds profit potential beyond just seasonal markets.

The weather hazards and the absence of a federally supported “floor” against crop losses has obviously created barriers that have prevented any significant movement to crops that will put more dollars back in our rural communities. Simply reversing some of the flow of capital to other states during Oklahoma’s harvest season—instead of importing the majority of our fruits and vegetables—is the first step towards creating a larger and more sustainable highvalue produce sector. Fresh produce (and, to a lesser degree, frozen produce) prices reflect distance to the consumer for both transportation costs and damage issues in transit.

Why is Oklahoma’s fresh and frozen produce market dominated by out-of-state producers who have those transportation issues as part of the cost of their product? In our next article we will answer that question and show how Oklahoma’s legislature can provide an environment to make Ms. Slagell’s success story much more common.

Steve Anderson Steve Anderson (MBA, University of Central Oklahoma) is an OCPA research fellow. A Certified Public Accountant with more than 30 years of experience in private practice, he is currently a partner at Anderson, Reichert & Anderson LLC. Anderson spent two years as a budget analyst in the Oklahoma Office of State Finance, and most recently served as budget director for the State of Kansas. At one time he held 17 state teaching certifications ranging from mathematics to physics to business.

www.ocpathink.org

11

MAKING THE MORAL CASE FOR FREE ENTERPRISE We tossed that tea into Boston Harbor not because of the extra pennies it cost but over a principle.

Mike Brake Mike Brake is a journalist and writer who has recently authored a centennial history of Putnam City Schools. He served as chief writer for Gov. Frank Keating and for then-Lt. Gov. and Congresswoman Mary Fallin, and has also served as an adjunct instructor at OSU-OKC.

Adam Smith. Friedrich Hayek. Milton Friedman. All legendary apostles of economic and political liberty. Now add Arthur Brooks to that pantheon, and you have The Road to Freedom: How to Win the Fight for Free Enterprise (Basic Books, 2012), a slim yet potent volume published in 2012 that gives us both blueprint and rallying cry in an era when many fear that the battle has already been lost.

Not so, says Brooks, who argues that those who cherish the free enterprise system have argued its merits the wrong way.

Our thesis is a moral one, Brooks suggests, and only moral arguments will prevail. While we have hammered away at data that clearly show the benefits of freedom (higher standards of living, multiple chickens in every pot), the other side—the statists, he calls them—have often had the better side of the debate because they played the morality card.

We’ve all heard it: debate with a person of the left and sooner or later you’ll be labeled “mean-spirited” or “greedy” or—curse of curses—“materialistic.” If we’d stop hammering at data and start suggesting that expanding liberty is the

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PERSPECTIVE • July 2015

right thing to do in a moral sense, we’d connect with the substantial majority of Americans who agree with us.

Brooks does not neglect the data in his book. China, for example, has accounted for at least 75 percent of the reduction in poverty in the developing world since that regime began to embrace free enterprise. Sixty years ago North and South Korea had identical gross domestic products. Today, thanks to economic liberty in South Korea, it is the 13th richest nation on earth, while North Koreans— same people, same climate, different systems—spend much of their shabby lives grubbing for roots.

But Brooks suggests that all those numbers barely put a dent in the arguments of statists who counter with such nonsense as “you just want to throw granny out in the snow!”

“Free enterprise,” writes Brooks, “is the system of values and laws that respects private property and limits government, encourages competition and industry, celebrates achievement based on merit, and creates individual opportunity.” Note that Brooks calls free enterprise a system of values—a term that implies a moral base.

“Our ideas about free enterprise and liberty were born from a sense of what was right and what helps us thrive as a people, not from a monomaniacal obsession with what makes us rich,” Brooks continues. In other words, we tossed that tea into Boston Harbor not because of the extra pennies it cost but over a principle.

The Brooks formula for debating the merits of free

Earned success leads to happiness. Free enterprise rewards merit and lifts the poor out of despair. These are moral arguments.

enterprise successfully is a simple one: stress that earned success leads to happiness, that free enterprise rewards merit, and that it lifts the poor away from and ultimately out of despair. These are moral arguments; there’s not a data point in them.

Brooks admits that the current dire state of American public policy—high taxes, astronomical deficits, intrusive regulation, diminishing liberty—is “the product of nearly a century of accumulated policy.” The answer, he says, could take as long, but it won’t happen at all unless and until we shift the debate to a moral one and start winning elections and debates in our policymaking bodies like Congress and state legislatures.

What’s moral about earned success? “People flourish when they control their lives,” he says, and that control is best achieved by earning what one receives, not impotently accepting it from government. Brooks notes that Americans work harder and longer than most Europeans, in large measure because those Europeans have already yielded up their economic autonomy to a paternalistic nanny state.

“But it’s not fair!” the left screams. Yes it is, says Brooks, noting that true fairness rewards merit, a moral act, rather than resorting to redistributionist policies that do exactly the opposite.

Brooks is at his best when citing evidence that a free economy both stimulates upward economic mobility and

Arthur Brooks at the Conservative Political Action Conference 2015.

makes even those on the bottom rungs richer and happier.

When the much-maligned “one percent” succeed, the “99 percent” dine from an expanded pie as well.

From these moral arguments Brooks turns to a set of specific prescriptions for restoring economic and personal liberty to Americans. Many are familiar, from entitlement reforms to rein in exploding deficits (which Brooks ably describes as immoral) to trimming corporate and personal income taxes with consequent reductions in government spending and power.

But the core of his book is that free enterprise unleashed results in personal and economic liberty that are morally right for humanity. That’s an argument the left would have a hard time countering, and one that a few 2016 presidential candidates are already starting to echo. And it’s about time.

LEAVE A LASTING MARK Leave your mark on OCPA’s campus. You now have the opportunity to purchase a memorial brick that will be used in the walkway leading to OCPA’s new Advance Center for Free Enterprise.

The $250 brick includes an engraving of your choice.

For more information, please contact Rachel at 405.602.1667 or rachel@ocpathink.org.

OCPAthink.org/memorial-brick

Oklahoma Needs Federal-Funds Transparency

By Tom Newell and Greg Treat

It’s no secret that the federal government’s debt is now more than $18 trillion. A bipartisan chorus of policymakers and policy analysts agrees that the current spending patterns of the federal government are unsustainable.

One of the significant drivers in federal debt has been the acceptance and expense of federal funds by state agencies.

According to the state’s Comprehensive Annual Financial Report (CAFR) prepared by the Oklahoma Office of Management and Enterprise Services, total federal funds used by state agencies in Oklahoma have risen dramatically. Just 10 years ago, in fiscal year 2004, federal funds totaled $4.3 billion.

Now federal funds total $6.7 billion, meaning our dependence on federal spending is growing, not decreasing. This growth of 56 percent exceeds income growth in Oklahoma, inflation growth, and the growth of other benchmark economic indicators. We’re more reliant on federal funds despite the fact that in fiscal year (FY) 2014, the state set a record for total state tax collections and fees.

Unfortunately, the use of federal funds by state agencies historically has not been very transparent. While Oklahomans can wade through the state’s CAFR to find the combined total amount of federal funds for all state agencies, additional and relevant detail isn’t easily available to the public or even policymakers on state government transparency websites.

According to a recent survey of Oklahoma voters by Sooner Poll, 64.9 percent of Oklahomans want to decrease federal influence in Oklahoma. This same poll found that 87.3 percent think state government spending of federal dollars should be more transparent and 91.6 percent of Oklahomans believe

that it’s important for Oklahoma to be financially prepared for reductions in federal funds.

The good news is that a number of states such as Utah and Idaho have already enacted laws requiring greater transparency and detail for federal funds from state agencies. To bolster the effort in Idaho, the governor issued an executive order requiring federal funds transparency prior to state legislative action, thus making federal funds transparency permanent in Idaho.

In Oklahoma, we worked during the 2015 legislative session to make such changes as well. [HB 1748 passed the House with a vote of 69-19 and passed the Senate with a vote of 39-1. It was vetoed by Gov. Mary Fallin.]

It is altogether reasonable for policymakers and the public to be able to easily obtain information on federal funds in one location without having to jump through bureaucratic hoops and red tape. What state agencies are spending federal funds?

What federal funds have state agencies received and for what programs? What are the “strings” or requirements attached to those funds? All of these questions are valid questions from the public and policymakers.

It’s time to expand federal funds transparency in Oklahoma so that policymakers and the public can have the best information about state agency use of federal funds and so that we can be better prepared to provide for core services of government.

Tom Newell, R-Seminole, represents District 28 in the Oklahoma House of Representatives. Greg Treat, R-Oklahoma City, represents District 47 in the Oklahoma Senate.

OCPA Officials Tout Transparency In a recent article in The Journal Record, law professor Andrew Spiropoulos lauded a proposal which “requires state agencies to publicly report the amount and nature of the federal funding they receive and, most importantly, the conditions they accept in exchange for the money.”

The proposed legislation by Rep. Tom Newell and Sen. Greg Treat “would make it easier for the public and policymakers to find out how much of our state government is funded by Washington and what policies we choose to let them impose on us,” wrote Spiropoulos, who serves as the Milton Friedman Distinguished Fellow at OCPA. “Some of this information is publicly available, but isn’t easy to locate or compile. Much of this information isn’t publicly accessible. Supporters of the bill surmise that agencies agree to implement numerous federal programs that legislators or citizens would not support if they were aware of them.”

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PERSPECTIVE • July 2015

OCPA president Michael Carnuccio points to one example.

“The unreported, successful push by bureaucrats several years ago to participate in an expansion of family planning services has resulted in Oklahoma taxpayers now having to fund the morning-after pill in the Medicaid program,” Carnuccio wrote in The Journal Record.

Spiropoulos was unimpressed with Gov. Fallin’s explanation for her veto of the transparency bill. “She’s concerned about the onerous burden these reporting requirements will place on agency staff. She says that, if you look hard enough, you can find the spending data elsewhere—but she says nothing about where you would find information on the conditions accompanying the spending. It seems more important to her to avoid burdening bureaucrats than to facilitate regulatory relief for our citizens.”

—Editor

1

2

3

@OCPAthink 1. Oklahoma City University law professor Andrew Spiropoulos is pictured here at a May 12 debate hosted by OCPA entitled “Does the First Amendment Protect Donor Privacy?� Spiropoulos serves as the Milton Friedman Distinguished Fellow at OCPA. 2. OCPA vice president Trent England is pictured here at the debate.

3. The 6,500-square-foot Advance Center for Free Enterprise, adjacent to OCPA, continues to move toward completion.

www.ocpathink.org

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QUOTE UNQUOTE “Cowardice of this kind today is found among those who defend or go along with the program of political correctness in our universities, or who are terrified (not too strong a word) to comment on the shoddiness of victim studies in higher education. Fear of unconformity reigns in large sections of university life.”

“I find it both amusing and sad that our state’s Republican leaders can march over to the regional party conference and boast of their commitment to small government and low taxes and, at the same time, while they are at the Capitol, lament that they didn’t have enough money to spend on government programs.”

Andrew Spiropoulos, OCPA’s Milton Friedman Distinguished Fellow

“This is like choosing between death by guillotine or being burned at the stake.”

State Rep. Brian Renegar (D-McAlester), discussing a choice between charter schools or vouchers

“I want to point out, for this cost, we can get almost two Supreme Court justices for the cost of one Jenks superintendent.”

“Republicans should simply stop campaigning on streamlining government until they have the political will to actually do it.”

State Rep. Jon Echols (R-Oklahoma City), debating in favor of a recent judicial pay-increase bill. Total compensation for the current Jenks superintendent is $209,718.

Oklahoma Republican National Committeeman Steve Fair, discussing political leaders who don’t appear to be serious about “right-sizing” Oklahoma’s state government

Joseph Epstein

“We are at the water’s edge of the argument that mainstream Christian teaching is hate speech.”

Sen. Marco Rubio